WORKING PARTY ON NATIONAL ACCOUNTS WPNA OCTOBER 2004

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WORKING PARTY ON NATIONAL ACCOUNTS (WPNA)OCTOBER
2004

• PROGRESS REPORT OF CANBERRA II GROUP

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PROGRESS REPORT OF CANBERRA II GROUP Outline of
presentation

• Meetings of Canberra II
• Issues listed by ISWGNA/AEG meeting
• Progress on issues to be considered in 2005
• Summary

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PROGRESS REPORT OF CANBERRA II GROUPMeetings

• Voorburg, April 2003
• Agreed on mandate
• Paris, October 2003
• Washington, March 2004
• London, September 2004
• Canberra, March-April 2005, either
• 29 March-1 April (4 days), or
• 13 April-15 April (3 days)

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PROGRESS REPORT OF CANBERRA II GROUPIssues
presented at February 2004 meeting of the
ISWGNA/AEG

• Taxes on holding gains
• Military weapon systems
• COT part 1
• Cultivated assets

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PROGRESS REPORT OF CANBERRA II GROUPIssues to be
presented at December 2004 meeting of the
ISWGNA/AEG

• Databases
• Originals and copies
• Mineral exploration
• Government-owned assets cost of capital
  services
• Treatment of land
• COT part 2

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PROGRESS REPORT OF CANBERRA II GROUPIssues to be
presented to the ISWGNA/AEG in 2005

• Research and development
• Nearly all members think some RD should be in
  the asset boundary
• the majority think all RD should be in
• but a minority think only that over which
  ownership rights are asserted should be
• Good progress on practical side
• Draft proposal to be presented at next meeting
  -decisions to be taken
• Patented entities
• Cost of capital services production account

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PROGRESS REPORT OF CANBERRA II GROUPIssues to be
presented to the ISWGNA/AEG in 2005

• Contracts and leases of assets
• Several issues dealt with at the latest meeting
• Delineation between finance and operating leases
  satisfactory? Yes
• Should we ever partition ownership of an asset?
  Only in exceptional circumstances
• What is the market price of a rental? The
  contract price
• Does the way payments are made determine lease or
  sale? Not definitive, only indicative

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PROGRESS REPORT OF CANBERRA II GROUPIssues to be
presented to the ISWGNA/AEG in 2005

• Contracts and leases of assets
• Key outstanding questions surround the situation
  when the free market rental price exceeds the
  payment due under the lease. When is this an
  asset of the lessee? How should it be treated?
  Written consultation on the first part. Paper on
  the second.

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PROGRESS REPORT OF CANBERRA II GROUPIssues to be
presented to the ISWGNA/AEG in 2005

• Goodwill and non-produced assets
• Agreed that purchased goodwill by corporations
  should be dealt with in the same way as
  unincorporated enterprises
• Obsolescence and depreciation
• Tentatively agreed on no substantive change
• BOOT schemes (PPPs)
• Written consultation on the principles to be used
  to determine who is the owner and on the
  accounting treatment.

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PROGRESS REPORT OF CANBERRA II GROUPIssues to be
presented to the ISWGNA/AEG in 2005

• Valuation of water
• Proposing to treat water as a non-produced
  tangible asset, attracting resource rent.
• Classification of assets and terminology
  (including Other intangible fixed assets)
• Many issues dealt with at the latest meeting,
  probably last issue to be concluded
• Written consultation on the major outstanding
  issues, such as inventories, treatment of assets
  under production, fish stocks

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PROGRESS REPORT OF CANBERRA II GROUPIssues to be
presented to the ISWGNA/AEG in 2005

• Asset boundary for non-produced intangible assets
• Should instruments involving the securitisation
  of government be treated as non-produced
  intangible assets?
• Amortization of tangible and intangible
  non-produced assets
• Remnant from mobile phone licence issue
• Definition of economic assets
• Influenced by RD outcome

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PROGRESS REPORT OF CANBERRA II GROUPSummary

• Of the 22 issues, 9 have reached the proposal
  stage
• Goodwill, Depreciation and Water are close to
  proposal stage
• Expect decisions to be made on most of the other
  10 outstanding issues at the next meeting. The
  remainder will be concluded by written
  consultation.
• Aim is to have to just consider draft proposals
  at the final meeting in September 2005